Israeli and Palestinian leaders have met in a fresh effort to advance the peace process. As Robert Berger reports from VOA's Jerusalem bureau, there is cautious optimism on both sides.

Israeli Prime Minister Ehud Olmert, right, shakes hands with Palestinian President Mahmoud Abbas, Jerusalem, 3 Oct 2007

Israeli Prime Minister Ehud Olmert hosted Western-backed Palestinian President Mahmoud Abbas at his home in Jerusalem. It was their sixth meeting in recent months, a sign of improving ties since the Islamic militant group Hamas seized control of the Gaza Strip three months ago, leaving the Fatah group of Mr. Abbas in control of the West Bank.

The two leaders are working to draft a document on Palestinian statehood to be presented at an international peace conference planned for November in the United States.

Spokesman Mark Regev says Israel is optimistic about reaching agreement on a joint statement.

"What we are trying to do at the moment, what the process as we lead up to November is, to see if it is possible to find a common ground, widest possible common ground, of what two states are, what is this peace that we are looking for," he said.

But the two leaders are deeply divided. Israel seeks a vague declaration of principles, while Mr. Abbas wants a detailed agreement on major issues such as the status of Jerusalem, Palestinian refugees, and final borders.

Palestinian official Hussein al-Sheikh believes the gaps can be bridged. He told Israel Radio that with goodwill on both sides, the peace conference will succeed and there will be hope for a better future.

Officials in Egypt and Saudi Arabia have warned that if the conference makes no progress on concrete issues, it could do more harm than good.

And Hamas, which seeks Israel's destruction, has warned Mr. Abbas against reaching a peace deal. The group urged him to abandon what it called "the illusion of peace" and return to armed struggle.